Why choose a Fixed-Term Annuity?
There are a number of reasons you might choose a fixed-term annuity.
The main benefit of a fixed-term annuity is that it allows you to keep your options open; you are not locked in to a lifetime plan. You have the flexibility to shop around again for whatever type of pension-income product at the end of your chosen term and choose one that matches your circumstances at that time.
Here are some of the reasons our clients have given for choosing a fixed-term annuity:
With the flexibility and advantages that fixed-term annuities offer, there does come some risk. For example taking too high of an income during your fixed-term or changes in market conditions could mean that any guaranteed maturity value you receive at the end of the fixed-term isn't enough to provide you with the pension income you need.
However, it's also possible that the pension income you decide to buy at the end of the fixed-term period could provide you with a higher income than that which you received during your fixed-term, however this would be impossible to predict.
If you are considering a fixed-term annuity, you should read our risks and considerations page.